[Code of Federal Regulations]

[Title 20, Volume 1]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 20CFR226.11]



[Page 456-457]

 

                      TITLE 20--EMPLOYEES' BENEFITS

 

                  CHAPTER II--RAILROAD RETIREMENT BOARD

 

PART 226_COMPUTING EMPLOYEE, SPOUSE, AND DIVORCED SPOUSE ANNUITIES

--Table of Contents

 

                 Subpart B_Computing an Employee Annuity

 

Sec.  226.11  Employee tier II.



    The tier II of an employee annuity is based only on railroad 

service. For annuities awarded after September 1981, the tier II benefit 

is computed as follows:

    (a) The product obtained by multiplying the employee's creditable 

years of service by the average monthly compensation, determined as 

shown in subpart E of this part, is multiplied by seven-tenths of 1 

percent (.007).

    (b) If the employee is entitled to a vested dual benefit (see Sec.  

226.12 of this part), the result from paragraph (a) of this section is 

reduced by 25 percent of the vested dual benefit amount. This reduction 

is made before reduction of the tier II benefit for age. The result 

cannot be less than zero.

    (c) If the railroad retirement family maximum applies, as shown in 

Sec. Sec.  226.50-226.52 of this part, the amount from paragraph (a) or 

(b) of this section is reduced by the smaller of--

    (1) The difference between the total railroad retirement maximum 

reduction amount and the reductions in the spouse and supplemental 

annuities; or

    (2) The total tier II amount from paragraph (a) or (b) of this 

section.

    (d) If the employee is entitled to a reduced age annuity (see Sec.  

216.31 of this chapter), the rate from paragraph (a) through (c) of this 

section is reduced in the same manner as the tier I as provided for in 

Sec.  226.10 of this part. In the case of an employee with 30 years of 

service who is entitled to a reduced age annuity (see Sec.  216.31 of 

this chapter), the age reduction only applies to the



[[Page 457]]



tier I component; no age reduction applies to the tier II component.

    (e) The total tier II amount (paragraphs (a) through (d) of this 

section), is increased by 32.5 percent of the percentage increase in the 

cost-of-living increase to the tier I annuity component. Each cost-of-

living increase is paid only to an employee whose annuity begins on or 

before the effective date of the increase. The increases are effective 

on the same date as any cost-of-living increase to the tier I annuity 

component.